3 Terrible Companies To Lose $5 Billion in Federal Green Energy Loans

In the last days of the Biden administration, the Energy Department dolled out billions of dollars for politically favored green energy projects. The Trump administration is looking to claw this funding back.

The Energy Department is getting ready to “cancel seven major loans and loan guarantees that had been conditionally approved under the Biden administration,” reports Semafor. This action will cancel approximately $5 billion worth of funding for a transmission project by a New Jersey utility company, a loan program for low-income homeowners to install rooftop solar panels by Sunnova, and a Monolith Nebraska factory to produce low-carbon ammonia. The remaining four projects, which collectively received over $3 billion, include three battery factories and a plastics and recycling facility, which “were already previously cancelled by their companies because of other various headwinds,” according to Semafor. 

The three active projects that will have their federal loans axed have faced their own share of problems. 

In September 2023, Sunnova received a $3 billion partial loan guarantee from the Energy Department’s Loan Programs Office (LPO) for Project Hestia—a program that would make residential rooftop solar, battery storage, and virtual power plants “available to more American homeowners.” Hestia was expected to provide loans to as many as 115,000 homeowners in the United States and Puerto Rico for these technologies, while creating “3,400 good-paying, high-quality American jobs.” 

After receiving the federal loan, Sunnova came under fire for its alleged history of predatory practices and scamming elderly clients, which led to subsequent congressional scrutiny. In April, Sunnova began filing for bankruptcy. The company recently said it was no longer planning to use the programming funding and was working with the Energy Department to return the remaining guarantees. 

Monolith received a $953 million conditional loan guarantee from the LPO to accelerate its clean hydrogen and carbon utilization project in Nebraska. The company, which has received backing from BlackRock and NextEra Energy and was valued at over $1 billion in 2022, creates hydrogen fuel with renewable energy (which can be used to make ammonia in fertilizers) and carbon black. Despite the federal funding and private sector support, The Wall Street Journal reported in September 2024 that the company was “running short on cash and facing project delays.” 

The third project facing the ax is New Jersey’s Clean Energy Corridor, “a project to upgrade and expand transmission infrastructure to accommodate planned generation in New Jersey to meet growing electricity demand.” Run by Jersey Central Power & Light Company, the project received a conditional loan guarantee of up to $716 million in January to support the state’s goal of “introducing 11,000 MW of offshore wind-generated electricity by 2035.” When First Energy, which owns Jersey Central, first announced the project in 2022, Danish energy company Orsted was planning two large wind projects off New Jersey’s coast. The projects were canceled in 2023. Another New Jersey offshore wind project was recently halted after the Environmental Protection Agency rescinded the project’s environmental permits. 

Despite these project cancellations and the LPO’s history of questionable and risky investments, it does not appear that the office is going away soon; Energy Secretary Chris Wright recently told lawmakers that his agency would use the LPO to advance nuclear energy projects. 

Assuming Wright fully cuts billions of dollars worth of wasteful projects and narrows the agency’s scope to only fund nuclear power projects, it’s possible that the LPO’s budget—which ballooned to over $400 billion under the Biden administration—could meaningfully shrink. 

Still, a meaningfully reduced budget is not enough. With the national deficit climbing to over $28 trillion in debt held by the public, taxpayers can no longer afford to support the federal government’s fantasy that it should be a green bank.

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